certain experience requirements. Candidates for reciprocal recognition, who qualify
by passing the local knowledge examinations of one of the bodies, will be exempt
from the obligation to write the final qualification examination of that body.
(iii) GATT/GATS. The Uruguay Roundtable package, negotiated under the auspices
of the General Agreement on Tariffs and Trade (GATT), included the first multilateral
agreement removing obstacles to accountants who wish to practice across borders.
Some of these hurdles, such as exchange controls and visa restrictions, are faced in
common with other service industries and providers. Others, notably difficulties in ob-
taining certification to practice in foreign jurisdictions, are unique to the professions.
The multilateral agreement, the General Agreement on Trade in Services (GATS),
addresses these problems in qualifying to practice in foreign jurisdictions in two
ways. First, its provisions on domestic regulation require countries to administer their
licensing or certification rules in a reasonable, objective, and impartial manner, and
forbids using them as disguised barriers to trade. To carry out this broad mandate, the
agreement envisions the development of more specific binding disciplines in the fu-
ture. Countries are also required to establish specific procedures for verifying the
competence and credentials of professionals from other countries. Second, the agree-
ment encourages countries to recognize other countries’ qualifications, either au-
tonomously or through mutual recognition agreements. It further sets out guidelines
to assure that such mutual recognition agreements are not used simply to discrimi-
nate against professionals from countries that are not party to them.
15.4 THE ATTEST FUNCTION. Exhibit 15.2 addresses some basic characteristics of
the attest function. It indicates by country which organizations are required to be au-
dited, how the auditor is elected or appointed, the objective or purpose of the audit,
and the source of auditing standards.
(a) Organizations Audited. Generally, auditing is seen as an important function in
most countries, as indicated by the broad requirements for organizations to be au-
dited. Most countries require public companies and companies with limited liability
to be audited. Some countries are very comprehensive in their requirements. For ex-
ample, Canada, in addition to requiring audits of public companies, requires private
corporations meeting certain size requirements and most nonprofit organizations to
be audited. In most countries, there are tests of size below which organizations do not
have to be audited.
(b) Election of Auditor. In nearly every country, the auditor is elected or approved
by the shareholders of the company. The only exception is Korea, where the auditor
is appointed by management or the audit committee.
(c) Objective or Purpose of Audit. The IAPC addresses the objective of an audit in
ISA No. 1, as follows: “The objective of an audit of financial statements is to enable
the auditor to express an opinion whether the financial statements are prepared, in
all material respects, in accordance with an identified financial reporting frame-
work”.^7 The guideline does not discuss the wording of the opinion, but states that the
15.4 THE ATTEST FUNCTION 15 • 15(^7) International Federation of Accountants, 2001, p. 46.